International Business in the Ethiopia

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Table of Contents

Political Analysis
Economic Analysis
Basic Need Potential
Financial Analysis

Political Analysis

Ethiopia which is officially known by its title of the Federal Democratic Republic of Ethiopia is located in the east of Africa. It borders on such countries as Eritrea, Somalia, Djibouti, Sudan, South Sudan, and Kenya. The area of the country is 1,100,000 km². The population of the country is more than 84,320,000 which makes it the second-most populated country in Africa. The capital of the country is Addis Ababa.

Ethiopia is a federal parliament republic. The country can be found in the list of authoritarian states. The head of the country is the President Girma Wolde-Giorgis. The country’s currency is birr.

Economic Analysis

Today, Ethiopian economic is the fastest-growing non-oil economy in Africa. Still, such growth does not mean material prosperity for the country as its GDP per capita is one of lowest in the world. Its nominal GDP is $31.256 billion or $360 per person.

Since 1991, the country took a course for economical reforms which resulted into 10% economic growth after 2003. However, this did not improve the situation with poverty which continues to be one of the most significant issues that the country faces both in urban and rural territories.

The agricultural sector of the country is very weak due to the climatic conditions and regular droughts; however it is the main sector of economy being the source for more than 40% of GNP. Agriculture makes up about 80% of the country’s export, and about 80% of population employment. Despite significant water resources including rivers and lakes, the irrigation system in the country is poorly developed with 1.5% of the territory coverage. Industry is weak in Ethoipia.

Basic Need Potential

Ethiopians suffer form the lack of basic things important for life such as food, housing, health care, healthy environment and educational system.

The need for clean water

Ethiopian need for clean water supply is by far the greatest problem in the country. In general, every woman in the country spends around 8 hours a day to collect water for the family from dirty recourses. Such water crisis leads to numerous social and economical problems in the country. For instance, every 20 seconds, a child dies in Ethiopia on the reason of being infected by bacteria form dirty water resulting into deadly diarrhea. The level of infant mortality in the country due to the lack of clean water is 8%. 49 million people in the country have no access to safe water, and 75 million people have no sanitation services in their houses which is also explained by the water problem.

Financial Analysis

Despite considerable progress in the area of economic development, Ethiopia continues to be among the poorest countries in the world. 38% of the country’s people live in gross poverty.

Financial threats

Among the biggest threats to the financial system of the country are unstable and unpredictable politics by the head of the state and the government, social insecurity of citizens, economical depending on donor countries, poor infrastructure including communication lines and roads, the threat of epidemics such as malaria, tuberculosis and AIDS, ethnical and religious conflicts among the country’s population, threat of wars with the neighbor countries including Sudan, Somalia and Eritrea, and high mortality rate.

Potential financial opportunities

The country has vast amounts of solar, hydro and thermal energy, vast agricultural recourses, irrigation potential of Nile and Omo rivers, and outstanding human resources of some of the most intelligent and physically gifted people in the world.

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